Machinery/Industrial Goods

Weir sells 2 units; says on track for 1H profit

AlexMacDonald

LONDON--Engineering company Weir Group PLC (WEIR.LN) said Thursday it has disposed of two renewables-focused operations for a combined GBP34.4 million ($50.5 million) while remaining on track to meet previous earnings guidance of first-half profit ahead of analysts' expectations.

The disposed businesses, American Hydro Corporation and Ynfiniti Engineering Services, were part of Weir's flow-control division and generated combined operating profit of GBP1.4 million on revenue of GBP38 million in 2015.

The U.K.-listed firm said it will record a loss on the sale of about GBP5 million. The disposals are part of the Group's GBP100 million asset-disposal program which is progressing to plan.

Weir also said it's net debt at the end of June will be lower than previous guidance as a result of the disposal proceeds and shareholder uptake of its shares-in-kind dividend.

The group said its business performance in April and May was consistent with the trends seen in the first quarter and in-line with expectations.

Orders for the five months to the end of May were 15% below the prior year period with orders and revenues in April and May slightly lower than the prior year.

As a result, Weir said it remains on track for first-half profit before tax amortization and exceptional items ahead of current market expectations GBP74 million, according to a company-compiled consensus forecast of analyst estimates.

The company said it's underlying cash generation remains robust and has made no changes to the its prior full-year guidance outlined on April 28.

Weir is due to update the market about its full year expectations at its first-half results on July 28.

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